Post navigation

Here comes the notorious RGGI

Here comes the notorious RGGI

Kiplinger rates
Pennsylvania as the
seventh-least tax-friendly state in the United States in its 2019 rankings.

Just to place this in simple
perspective, 43 states have a more friendly tax environment.

The publisher of business forecasts
and personal finance advice cites, among other things, the Keystone State’s high
property taxes and the second-highest gasoline taxes in the nation.

It’s certainly not the kind of thing
that attracts people, business and industry.

And it appears
that Gov. Tom Wolf wants to make
the tax climate – if not the commonwealth’s overall business climate — even
less friendly.

On Thursday, the governor “ordered his
administration to start working on regulations to bring Pennsylvania into a
nine-state consortium that sets a price and caps on greenhouse gas emissions
from power plants,” reports The Associated Press.

It’s known as the ‘Regional Greenhouse
Gas Initiative” (RGGI). But as long as silly acronyms are being employed, many
would prefer “RKERPI” – the “Regional Kill the Economy & Raise Prices
Initiative.”

Of course, anytime the word and phrase
“government” and “sets a price and caps” appear in the same sentence, we should
hold onto our wallets.

A government-created “market” is not a
true marketplace. And the plan represents a hubris akin to a claim that the
number of angels on the head of a pin can be counted.

Proponents of tackling “climate
change,” however, see things differently. But a 2017 white paper by Cato
Institute scholar David T. Stevenson took the proponents’ scholarship to task.

Simply put, he debunks “claims by the Acadia Center
and RGGI Inc. that the RGGI program has generated significant benefits.”

From
the paper’s conclusion:

“Using
data from five comparison states with similar overall electricity policies,
except for RGGI, along with looking at national trends, I find the RGGI Inc.
and Acadia Center claims to be misleading.

“The
Acadia Center claims that compared to other states, RGGI states increased
electric prices by half as much, had 3.6 percent more economic growth and
reduced emissions 16 percent more, leading to greater health benefits from
pollution reduction.

“Linking
real economic growth to RGGI alone is fraught with problems. Real economic
growth rates in RGGI states between 2007 and 2014 varied widely from a negative
7 percent for Connecticut to a plus 8.2 percent for New York.

“Also,
average RGGI revenue only amounted to 0.01 percent of the combined average real
GDP of the RGGI states, so one wouldn’t expect much impact.

“Ignoring
those difficulties, real economic growth was 2.5 times faster in comparison
states than in the RGGI states. High RGGI state electric rates led to a 35
percent reduction in energy intensive industries and a 13 percent drop in the
goods production sector, while comparison states saw only a 4 percent drop in
energy intensive industries and a 15 percent gain in goods production.

“This
article finds there were no added reductions in CO2 emissions or associated health
benefits from the RGGI program. RGGI emission reductions are consistent with
national trend changes caused by new EPA power plant regulations and lower
natural gas prices.”

Yet
the Wolf administration wants to climb on to the RGGI bandwagon?

It
certainly sounds like the latest in a long line of government rackets that,
past being prologue, have the exact opposite effect of what is claimed.

Remember
this as the debate over RGGI heats up.

Colin McNickle is communications and marketing
director at the Allegheny Institute for Public Policy
(cmcnickle@alleghenyinstitute.org).